re: Emergency Fund

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I wouldnt consider my retirement accounts emergency funds at all.

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A Roth can be, yes.

Suppose you have $5000 at the end of the year. And it happens you plan to set aside $2000 for your rainy day fund. Do you:

1) Contribute $3K to the Roth and $2K to the rainy day fund?
2) Contribute $5K to the Roth so all earnings can be tax-free, and withdraw from it if you need to.

2 is the clear answer - earnings are tax-free.